Munjal Showa's Q2 FY24-25 financials show negative performance, receives Strong Sell call

Munjal Showa, a microcap auto ancillary company, recently declared its financial results for the quarter ending September 2024. However, the company's stock has been given a "Strong Sell" call by MarketsMOJO.

According to the financials, Munjal Showa has seen a negative performance in the second quarter of FY24-25, with a score of -12 compared to 2 in the previous quarter. Despite this, there are some positive aspects to the company's financials. The net sales for the quarter were the highest in the last five quarters at Rs 317.72 crore, and the near-term sales trend is positive.

However, there are also some concerning factors in the financials. The profit before tax less other income (PBT) for the quarter was at Rs -8.35 crore, which is a significant decrease of -1082.4% compared to the average PBT of the previous four quarters. The profit after tax (PAT) also saw a decline of -73.7% compared to the average PAT of the previous four quarters. The operating profit (PBDIT) for the quarter was the lowest in the last five quarters, and the operating profit margin was also at its lowest at -1.65%. This indicates a deterioration in the company's efficiency.

Another concerning aspect is the company's non-operating income, which is 1,070.93% of the PBT. This means that the company's income from non-business activities is high, which is not a sustainable business model. Additionally, the debtors turnover ratio for the half-yearly period was the lowest in the last five periods, indicating a slowdown in the company's pace of settling its debtors.

Overall, Munjal Showa's financial performance for the quarter ending September 2024 has been negative, and the company's stock has been given a "Strong Sell" call by MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.